CB Richard Ellis Reports Bangkok Condominium Prices Hit a Record High

In 2007 record prices were achieved for Bangkok luxury condominiums reports CB Richard Ellis.

Bangkok, Thailand (PRWEB) January 31, 2008 -- The Sukhothai Residences developed by HKR International set a new price record achieving over 343,000 baht (US $10,400) per square metre with a lump sum price of over 408 million baht (US $12.4 million) for one of its penthouses. Over 45% of the condominium units in the Sukhothai Residences were sold in a soft launch in November 2007 achieving an average price of over 220,000 baht (US $6,600) per square metre for its typical units.

"The average price of new Bangkok luxury condominium projects rose to 136,000 baht (US $4,100) per square metre a 20% increase from the beginning of the year," according to the latest report from CB Richard Ellis.

The total supply of condominiums in downtown Bangkok increased to 51,270 units by the end of 2007, a 10% increase on 2006. In Q4 2007, 11 new projects with 2,572 units were launched and six developments with 1,034 units were completed. The occupancy rate remained high at 87% showing that there was continued strong demand from end-user occupiers and tenants.

Foreign interest in Bangkok condominium has increased and CB Richard Ellis believes that on average 40% of new sales in luxury condominium projects are to foreigners. Foreign demand is coming from both expatriates living in Thailand and overseas buying currently resident outside of Thailand.

"We believe that many of the foreign purchasers are acquiring property in Bangkok because they intend at some time in the future to spend part of the year living in Thailand. Bangkok offers excellent value for money both in lifestyle and property pricing," said James Pitchon director of CB Richard Ellis (Thailand) Co., Ltd.

Bangkok has become a centrally focused city. Historically Bangkok has expanded outwards but the completion of two mass transit systems covering the city centre and mid town locations has anchored the city centre. Most new office and retail developments are being built next to mass transit stations and residential areas are clustered around these commercial development hubs.

Bangkok has also seen large changes in social patterns. Traditionally people would not leave their parents home until they got married. Today more young Thai singles are leaving the family home before getting married to live in the city centre. This "skytrain" generation is driving demand for mid range condominiums. In the past the first major item someone would buy would be a car but today some people are choosing to buy a downtown condominium rather than a car.

A 40 square metre studio condominium unit next to a mass transit station is only two to three times the price of a small saloon car. In some cases the monthly repayments are lower because purchasers can get 20 year mortgages for condominium property but only five year financing for cars.

Although Bangkok condominium property have risen the increases have been closely linked to replacement cost. Both construction costs and land prices have risen over the last few years. In certain locations there is now a scarcity of development sites. This is a new situation for the Bangkok market where historically there has been a plentiful availability of development sites.

CB Richard Ellis remain optimistic about the performance of the Thai luxury property market despite the global credit crisis.

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